Eight Stages Of Economic Integration

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Economic integration is defined as an economic disposition between different divisions that are associated together through the synchronisation of fiscal and monetary policies as well as the reduction or elimination of barriers to entry for trading. The sole aims of economic integration are to succour both consumers and producers, by minimising costs, and also to maximise trade between the countries which are involved.

In total, there are 8 stages in the economic integration operation, starting from a highly loose alliance of countries in a preferential trade area, to a completely economically integrated coalition, whereby all the economies of the member countries in the union are thoroughly integrated. The first stage is when all countries start out as independent economies, then they proceed on to the ‘preferential trade area’ stage, followed by a free …show more content…

The free movement of their goods and services should be able to prompt and increase its trade, with the barriers of entry being stripped away. Theoretically, all Member States in the European Union are able to benefit from this because it grants them the opportunity to specialise in those goods and services that they are proportionately more coherent at producing.

Furthermore, domestic producers also face strong competition against international producers due to the reduction in the barriers to trade, and when there is an increase in the size of the market in which firms are able to sell, this delegates UK’s economy to harvest their economies of scale. All in all, these repercussions function to lower consumption prices in addition to raising overall economic welfare, despite the costs of the disruption or disintegration of a few sectors and industries upon exposure to international and foreign

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